After winning the gold medal in the Olympics, Neeraj Chopra is getting prizes everywhere. He is lauded with cash and car prizes from the prominent person, Anand Mahindra. In such a situation, the question in the minds of many is whether Neeraj will have to pay tax on the prizes he has got.
Let us tell you that the rewards received by the central and state govt remain tax-free. Chartered Accountant Anand Jain reveals that under section 10(17A) of the Income Tax Act, if the central and state governments give any kind of reward to a winning player, then it will be completely tax-free. In 2014, the Central Board of Direct Taxes (CBDT) had passed an order making tax-free cash or goods received by the central or state governments as rewards to medal winners in the Olympic Games, Common Wealth Games and Asian Games are always tax-free.
Tax will have to be paid on other rewards, on this Anand Jain says that only the reward received from the central or state government is not taxed. Apart from this, if the winner gets any reward from somewhere, then tax will have to be paid on it. Like Anand Mahindra has announced to give a car reward to Neeraj Chopra. Neeraj Chopra will have to pay 30% tax on this car. under the existing rules, if you get a gift worth more than 50 thousand rupees, then you will have to pay tax on it. Sometimes you get a gift on many occasions in a year and its total value may be more than 50 thousand rupees. In such a situation, you should keep this in mind while filing an income tax return. You will have to give information about the gift of more than 50 thousand rupees in the income tax depaartment. If you hide this information from the Income Tax Department, you may face difficulties later.